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OPINION

China offers wake-up call for America

Terry Paulson, Columnist
Published 7:01 a.m. PT Dec. 2, 2018

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China's Shanghai exchange fell into bear territory Tuesday, another signal that the government's efforts to manage the economy are not having their intended effect. Can China withstand an all-out trade war with the United States?(Photo: superjoseph / iStock)

China is an impressive country. When you get beyond the Great Wall, the Terracotta Army and the majestic Three Gorges, you can’t help but be struck with China’s visible and rapid economic expansion. As guides brag, “Come back again to our country, and you will see a different China. In fact, wake up tomorrow and you’ll see a different China.” The official bird of China is the crane — the towering construction cranes visible across the skylines of its major cities.

It’s not communism that has made the difference; it’s what we call capitalism, a market-driven economy on steroids. Before the communist Cultural Revolution, only the rich lived well. Although guilty of atrocities, Chairman Mao’s ascendance did bring food and other basic needs to many Chinese citizens. The rich were taken down, and companies were taken over by the government.

But something happened as communism took its toll on the motivation of its citizens. Soon, people were doing less for themselves, waiting for government to provide what they used to do for themselves. The standard of living stagnated. Why work hard when what you receive is no more than those who do nothing? The time was right for change.

In 1978, Deng Xiaoping introduced economic reforms that would unleash the potential of this resource-rich country. With a market-driven economy, initiative and hard work were again rewarded; citizens got to keep more of what they earned. Looking at the skyscrapers, the well-dressed citizens and their expensive cars, it’s clear those changes have worked for many.

When Deng Xiaoping was asked whether he’d rejected communism for capitalism, he replied, “It does not matter whether a cat is black or white, just whether it can catch mice.” Now, China is catching mice at a record pace. It already has the second largest economy in the world. Experts expect China’s GDP to exceed the U.S. They disagree only on when that will happen — estimates vary from 2025 to 2032.

The young are fueling that growth by providing a disciplined, educated and motivated work force. Their focus is improving their economic and professional position.

Not to be charged with looking at China through rose-colored glasses, many we met privately expressed concern about Xi Jinping’s decision to be China’s perpetual president. Tough trade and tariff talks remain, but as long as life is good, most in China do not worry about “politics.”

There remains extensive government control. While watching CNN in our room, the screen went blank when a pundit began criticizing China. When his comment was over, the coverage returned. As messy and chaotic as freedom of the press can be, how blessed we are in America to preserve our freedoms. We pass the public square test — we can scream from any street corner about our president and survive. In fact, many will applaud.

China need not be a threat if it can become America’s wakeup call. We cannot coast if America wants to maintain its dominant position in the world’s economy. President Trump’s efforts to once again unleash the potential of our economy by providing tax-cut rewards for companies and citizens who work hard is a step in the right direction. Cutting dependence on government and challenging more people to develop marketable skills and earn their own American dream is our best hope of keeping China in our rearview mirror.

We have the people, the skills and the freedom to meet the challenge, and we must each do our part.

Terry Paulson, of Agoura Hills, is a speaker and author of "The Optimism Advantage." Email him at terry@terrypaulson.com.